Mortgage. Appraisal. Market. Agent. Millage. Acre. Those are the kinds of M and A words normally associated with residential real estate. Not M&A as in Mergers and Acquisitions. But the latter has more and more become industry news lately, in addition to frequent consolidations as well, with smaller firms joining national brands in order to access high-end tech stacks, benefit from superior marketing and cut overhead.
The latest M&A deal was Rocket Companies buying Redfin, with Rocket claiming it will be able to save buyers time and money finding a home and mortgage from a single source. Before that Keller Williams brought in an outside investor, Stone Point Capital, to boost the brand—and maybe more. Late last year Compass acquired @properties Christie’s International Real Estate, and recently was rumored to be acquiring some or all of the Berkshire Hathaway real estate businesses, though HomeServices denied it.
What does all this corporate musical-chairs maneuvering mean for the rank and file, for the boots on the ground working tirelessly with buyers and sellers in a challenging market? Certainly one plus is that major real estate portals and brokerages are often happy to add as many agents as possible, whereas with many other businesses that join forces employee redundancy leads to layoffs.
Most agents are too busy grinding 24/7 with clients to spend a lot of time pondering what all the C-suite negotiations and due diligence reports might mean to them. But there is also an awareness that, like all companies, the challenge exists to gain a competitive edge through most any means necessary.
RISMedia sought opinions from real estate professionals nationwide, asking what they thought about all the action now and how they envisioned the industry evolving in the near term. Many responses centered around a similar theme, which is that regardless of whose flag they fly, real estate sales have been, are and will always be hyperlocal.
“We are firm believers in the boutique brokerage model, where agents have the flexibility and support to truly prioritize their clients,” says Rayni Williams, CEO and co-founder of The Beverly Hills Estates, in Los Angeles. “Large-scale mergers may streamline operations for the owners of the company, but they do little to benefit the agents on the ground. At the end of the day, real estate is a relationship-driven business, and corporate bureaucracy often gets in the way of that.”
Rocket/Redfin perspectives
While acknowledging the corporate consolidating, Pam Rosser Thistle, an agent with Berkshire Hathaway HomeServices Fox & Roach, REALTORS® in Philadelphia, points out that not only is real estate a local endeavor, but each city or town may have its own unique laws or rulings that someone from the outside could or may not know.
“As the number of transactions slims, more mergers and partnerships will happen,” she predicts. “Some models need to be adjusted for survival and profitability. We are also working around new rules, often vague, as a result of the commission lawsuit. With change comes opportunity, but also risk. Some bold moves pay off, while others fizzle out. The reality check is how the consumer reacts.
“With the Rocket acquisition of Redfin, I don’t see any impact here. In my hundreds of transactions over the last 17 years, I have never seen a Rocket pre-approval or heard of anyone using that company, though the Redfin app is very good. All real estate is local, and Philadelphia is a tricky market, with specific rules. Lenders need to know the nuances. For example, our 10-year tax abatement program was recently cut in half, with a gradual easing to full value.
“Agents are built tough. We are entrepreneurs at heart. Just as we offer calm guidance to clients, we need to be prepared to assess and act on changes prudently. At this time, there is talk, but no confirmation of a Compass Berkshire/Hathaway merger. We will see.”
Alyssa Soto, co-founder of Powered by DMT, a luxury development-focused marketing and sales brokerage with locations in New York and Miami, sees uniting pros and cons.
“Regarding of the Rocket-Redfin and (rumored) Compass-HomeServices mergers, industry sentiment is mixed,” she says. “Many agents view these consolidations with cautious optimism but also legitimate concerns. From my perspective, they represent the continued evolution of our industry toward technology integration and service streamlining. The potential benefits include improved technology platforms, more consistent service delivery across markets and possibly enhanced efficiencies in transaction management.
“However, there are valid concerns about market concentration, potential impacts on commission structures and whether large conglomerates can maintain the personalized service that defines successful real estate relationships. When explaining these deals to buyers, I emphasize that they’re part of the industry’s ongoing evolution. While the branding and corporate structure may change, the fundamentals of real estate remain relationship-driven. The most important factor for buyers isn’t necessarily which company name is on the yard sign, but whether their agent provides expert, personalized guidance.
“As for whether these mergers will benefit buyers through time and cost savings, the jury is still out. The promise of vertical integration–mortgage, title, brokerage services under one roof–could potentially create a more streamlined process. However, this convenience might not always translate to cost savings, as reduced competition can sometimes lead to higher fees or reduced incentives to innovate on price. Ultimately, the success of mergers will depend on how well these larger entities balance corporate efficiency with the personal touch that defines great real estate service.”
Ivan Sher, founder of IS Luxury, in Las Vegas, is another who insists that personalized service is the key to winning in real estate sales.
“As the industry continues to consolidate into big box giants, the value of boutique brokerages like ours has never been greater,” he says. “While these mergers may drive efficiency and scale for the larger players, they often overlook the personalized, community-focused experience that many clients seek. There will always be a growing demand for firms that prioritize tailored service over a one-size-fits-all approach.”
Indeed, Jeffrey Decatur, a broker associate with RE/MAX Capital in Upstate New York, cautions that there may be many more issues than corporate executives consider when deciding if and when to join forces.
“Rocket acquiring Redfin surely has some advantages, or they wouldn’t have done it,” he says. “However, what concerns me is the distance and service. If Rocket streamlines the process into another super app, they create distance—putting space between the consumer and the vendor. It becomes a voicemail hell or call center to deal with.
“As a local agent, you can have your buyer meet the mortgage professional in person. That is a huge benefit. While it might be perceived as inconvenient, working with someone outside the area is not ideal. You never get direct contact, and when you call you probably speak to a different person who may give you a different answer. There is a lack of accountability and passing the buck that happens hidden behind a phone or keyboard.”
Decatur goes on to point out that in his state there are multiple ways to close a property, and if the mortgage professional is out of state there likely will not be the same level of service. “If you need something rushed—forget it,” he says. “If you need an answer about a mortgage condition, you’re on hold for half an hour and then can get a conflicting response from a new person.
“I once had a mortgage underwriter ask me for title work, but that’s not how it’s done in New York. It took weeks to reach someone who understood how the process actually works—rather than someone who was just reading off a computer screen. When you’re an agent who has an established relationship with a mortgage professional, things are different. You can get answers after hours, on nights and weekends. You can deliver something personally to an underwriter. You can talk to the same individual from start to finish. That makes a difference. A mortgage professional who has a relationship with an agent values that connection and won’t risk losing future business.
“They say these consolidations are done for the consumer to make things easier—everything in one place, all in-house. Sounds great in theory. Sucks in practice. One hand doesn’t know what the other is doing. But if you don’t know what you had, you won’t miss it. There are so many horror stories about additional fees, last-minute bait-and-switch mortgages the day of closing, duplicate paperwork, losing paperwork, the list doesn’t end. And there is nothing you can do about it. Your only form of communication is via an email or call center, unless you drive halfway across the country to meet them at their office.”
Briggs Elwell, CEO and co-founder of RLTYco, a New York-based benefits and service company for real estate agents, takes the long view on how the industry may very well benefit from mergers, acquisitions and consolidations.
“Buyers and sellers generally favor efficiency and streamlined processes, and given the historically challenging nature of the mortgage-to-closing experience, consumers would likely welcome mergers that simplify these steps,” he says. “Currently, lenders primarily offer loans. However, strategic partnerships could enable them to assist with home searches and secure better deals for buyers. As consolidation continues across the real estate market, lenders participating in this trend could provide long-term benefits to consumers.”
